Heritage Foundation Leadership for America

Are the "savings" promised for health-care reform wise ones?

Some cost-savers just aren't worth it: Skipping a mammogram when you have a family history of breast cancer is a bad idea. Yet there are lots of bad ideas on the table in the health-reform debate.

Patients are "going to have to give up paying for things that don't make them healthier," President Obama announced at his last prime-time press conference. "If there's a blue pill and a red pill, and the blue pill is half the price of the red pill and works just as well, why not pay half for the thing that's going to make you well."

If only it were that simple. Certainly, generics or drug substitutions can often save money and still be medically effective. But for other conditions, only certain medications or procedures will do.

Thus, a simple tonsillectomy may still be the best remedy for some cases of chronic throat infection. For more serious, life-threatening or complex cases the same is often true. In such circumstances, wouldn't you want to be able to make the decision yourself along with your doctor?

But "reform" would empower federal bureaucrats, not doctors and patients, to make detailed decisions about care.

In the House bill, benefits would be set by federal bureaucrats through a Health Choices Administration, led by a presidentially-appointed Health Choices Commissioner. This individual would decide what benefits and services all health policies must cover, and would draft "standards" for all insurance, too.

Then there's the House plan to provide a "public option" -- a government-run health plan to "compete" against private health insurance. The premise is that this would force insurers to offer lower rates to compete with the government plan. The reality, according to a recent analysis by the Lewin Group, is that it will push more than 83 million Americans out of private-sector insurance.

The House bill also would cut Medicare benefits by cutting payments to traditional fee-for-service providers. The cuts to providers will leave even more doctors reluctant to take on new Medicare patients, and force hospitals to increase what they charge people with private insurance.

The House also tries to "save" by reducing payments to private Medicare Advantage supplementary plans; this "savings" would push seniors into more expensive Medigap options and Medicaid.

Lawmakers are trying to shave spending from giant programs like Medicare and Medicaid without really reforming them. Yet these behemoth entitlement programs are now set to bankrupt the nation. Medicare, the biggest, is $38 trillion in the red.

We do need to make tough choices to rein in spending on these entitlements, lest they leave this immoral burden or crushing taxes to future generations.

But Congress is simply assuming that its health-care reforms will miraculously "bend the health-care curve down" -- somehow reducing cost growth and thus painlessly fixing Medicare's problems too.

And to help cover the huge costs of its "reform," Congress is cutting Medicare piecemeal -- which really would lead to benefit cuts for America's seniors.

It's one thing to make tough choices. It's another to cut benefits on seniors to pay for a huge new entitlement that would make the overall problem worse. Hardly bending that cost curve down.

Alison Acosta Fraser is director of the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.